Posted by Tracy_CA on 3/19/06 5:41pm
Msg #106844

Tax Write Off

I use to write my car interest off but since I got a new tax guy, he is telling me that I can not write off my interest, only my miles. Can any of you tell me what expenses you write off from your car?

thanks for the help.

Reply by Tracy_CA on 3/19/06 6:01pm
Msg #106847

Never mind.....I did the research on my own. I found out that my first tax guy was doing a bad thing! thanks anyway

Reply by cmd_NH on 3/19/06 6:05pm
Msg #106848

To be able to deduct actual expenses for a vehicle you must use it for more than 50% business use. You must keep track of your mileage for business use and personal use.
If the vehicle is used less than 50% for business use you must use the standard mileage rate.
Only the business portion of expenses are deductible.

Reply by cmd_NH on 3/19/06 6:08pm
Msg #106850

Re: Oops! Correction....clarification.

To be able to deduct actual expenses for a vehicle you must use it for more than 50% business use. You must keep track of your mileage for business use and personal use. Only the business portion of expenses are deductible.
If the vehicle is used less than 50% for business use you must use the standard mileage rate.
Only the business mileage is deductible.

Reply by JD/MD on 3/20/06 4:54am
Msg #106885

Re: Oops! Correction....clarification.

Re: Oops! Correction....clarification.
Posted by cmd_NH of NH on 3/19/06 6:08pm
Msg #106850 from logged in user

"To be able to deduct actual expenses for a vehicle you must use it for more than 50% business use.
If the vehicle is used less than 50% for business use you must use the standard mileage rate.
Only the business mileage is deductible. "


Could you please direct me to where in any publication from the IRS that states business use of an automobile must be used more than 50% to claim actual expenses? The only thing that I can find in any of the pubs about less than 50% use of an auto has to do with the section 179 depreciation deduction.

Reply by cmd_NH on 3/20/06 7:29am
Msg #106908

JD/MD

Publication 535/Business Use of your car
Publication 463/Actual Expenses.

If you are using actual expenses:
you use your vehicle for more than 50% business use.
Say you use it 60% business use and 40% personal use. Only 60% of the total depreciation for the year is deductible as a business expense. And 60% of the expenses are deductible. There are limits on how much you can take for the Section 179 expense.

If you use the vehicle for less than 50% business use you cannot use actual expenses or depreciation, you would use the standard mileage rate.
Only the business miles driven are deductible.

Of course you must keep records for proof.

Reply by JD/MD on 3/20/06 8:31am
Msg #106953

Re: JD/MD

If you use the vehicle for less than 50% business use you cannot use actual expenses or depreciation, you would use the standard mileage rate.


If you could please provide a page number in the pubs for this it would be helpful. I read on page 22, pub 463 an example of how to depreciate a vehicle with less than 50% business use in a year. It states to use a 5 year recovery period using a straight line depreciation method. It also provides an example. If you could provide the pub and page number where you are getting your information about not being able to depreciate a vehicle with under 50% usage I would appreciate it.

Reply by cmd_NH on 3/20/06 5:40pm
Msg #107166

Re: JD/MD

I stand corrected. I was speaking of using the MACRS depreciation. In that case you have to pass the "more than 50% use test". Page 18. You are correct that you can use the straight line method for under 50% use...but either way, only to the extent of business use.